On Tuesday, the Overseas Private Investment Corporation (OPIC) signed an agreement with US based energy developer SolarReserve and Saudi Arabia-based ACWA Power, acknowledging OPIC’s $400 million commitment of debt financing to support the development of the Redstone Concentrating Solar Power (CSP) project in Northern Cape, South Africa.
Elizabeth Littlefield, OPIC’s President and CEO commented: “The development of the Redstone project will benefit the South African people, the international clean energy sector, and the role of U.S. leadership in emerging market development.”
CSP to drive economic development
The 100MW Redstone CSP project will feed clean power into the country’s national grid with the ability to store and deliver consistent base-load power during peaking periods, OPIC said in a statement.
SolarReserve’s CEO Kevin Smith said: “The Redstone project marks an important technology advancement for Africa in clean, renewable power, and a demonstration of U.S. developed technology that is leading the world in large scale solar energy storage.”
“In addition, the project’s delivered electricity price is the lowest of any CSP project in the country to date.”
The cost of CSP and whether it is a cost competitive technology compared with other alternative power solutions, is still something which is being debated.
Speaking at a conference in Cape Town this month, Cedric Philibert, Senior Analyst at the International Energy Agency, stressed that the total cost of CSP technology should not be compared to solar photovoltaic, a popular clean power technology choice currently in South Africa. Rather it should be measured on its position and its ability to meet peaking periods, even when the sun goes down.
According to Paddy Padmanathan, President and CEO of ACWA Power: “Quite apart from the socio-economic contribution this project will make to South Africa, the first time deployment of CSP Tower technology in the country using a project finance framework, which was made possible by the galvanizing leadership of OPIC financing, will enable this very important clean energy technology to be deployed at scale and at a faster pace than otherwise would have been possible.”
Team work goes along way
Patrick Gaspard, US Ambassador to South Africa said: "We are excited about the progress forged by OPIC and these private sector leaders on the Redstone project.
“It's a priority for South Africa and regional neighbors to diversify their power production beyond traditional energy sources, including a greater share of renewables, efficiency improvements, and energy storage capabilities.
He added that by the US supporting South Africa through partnerships with development oriented agencies, they can increase sustainable access to electricity, “a foundation linked to overall lasting economic growth."